CA shifts focus to product strategy

That's the message Computer Associates' top management delivered on Sunday at the company's annual customer conference, CA World, which is being held in Las Vegas this week.

Interim CEO Kenneth Cron, former CEO Sanjay Kumar, board Chairman Lewis Ranieri and other executives spoke at press briefings Sunday about how the company intends to operate following a tumultuous year dominated by an ongoing investigation into CA's accounting practices.

In the wake of inquiries by the Securities and Exchange Commission and Department of Justice, Kumar stepped down as CEO, the company restated its financial results for fiscal years 2000 and 2001, and it dismissed several employees implicated in accounting irregularities.

"I'm using CA World 2004 to be a lighting rod to move on and mark a new chapter," said Cron, adding that there will not be any more terminations at CA related to the accounting probe. "All that stuff happened, no doubt about it. Nobody is going to whitewash it or pretend it didn't happen."

Cron said the company has finished its internal investigation, which led to the personnel shake-up and financial restatements. A government investigation, however, is ongoing, and board chairman Ranieri is tasked with working with regulators.

Kumar, speaking publicly the first time since he ceded the CEO position and became chief software architect, said that in his new role he intends to better define the company's technology strategy in the short term as well as consider what CA's direction should be two years from now. Another important aspect to his new role is making the interim CEO succeed, Kumar said.

"I'm not CEO--that's very clear. I'm one of those people that's very black and white about it. A lot of people wonder, 'How do you make the transition?' But I care so deeply about this place and unless you understand how deeply I care about this place, it's really difficult to understand how I can just flip hats and say I'm no longer CEO," Kumar said. "My job is to make Ken (Cron) and Louis (Ranieri) and the rest of the management incredibly successful."

Overall, the company's product strategy will be "evolutionary," Kumar said, as the company seeks to better integrate its different management products into a more cohesive suite.

Kumar said that in his new position he intends to spend about half of his time with clients, which is what he did as CEO. Maintaining that customer contact is important because Kumar played an important role in improving strained customer relationships during the past few years, company executives said. Kumar's continued presence also serves to assuage customers' concerns about the direction of the company.

Cron said that, since taking over as CEO, he has met with about 20 of CA's largest clients and had phone calls with another 15. He said he will stay on until the CA board finds a permanent replacement and then he will rejoin CA's board, which he became a member of in 2002.

The company hopes to conclude the ongoing government investigation as soon as possible. Ranieri, who is working with investigators, said that despite the turmoil, the changes at CA were necessary.

"I don't think we've been treated unfairly either by (the Department of) Justice or the SEC," Ranieri said. "Their intention is justice, not retribution."

Rather than dwell on the internal changes of the past several months, CA is emphasizing its product strategy at its customer conference this year. The company unveiled its Enterprise Infrastructure Management initiative, a plan to better consolidate its management offerings to promote sales of its management software suite.

The company's strategy is to create a unified management product line that will allow IT managers to manage security, storage and other computing gear with a single console. In the next version of its main management product, called Unicenter 11, which is expected to go into beta testing this year, CA will build a "federated data model" that will enable CA's management tools to share information more effectively, which will simplify administration.

"CIOs are doing more integration than we'd like," said Mark Barrenechea, senior vice president of product development at CA.

The more-unified software system will allow IT organizations to answer basic questions, such as how many PCs and servers are connected to a network, or what servers have the most recent patches, he explained.

Although CA's product vision is sound, the reality at customer sites is somewhat out of sync, said Ray Piquet, an analyst at research company Gartner. Most companies typically buy point products for different management tasks, such as desktop administration or software distribution, which is handled by different specialists within an IT organization.

"They've taken a lot of data and they're integrating it, but they still have a long way to go--as do the users, because they don't have well-developed processes," Piquet said. "Until IT organizations get their processes together, they won't be buying suites."

CA also introduced a new product called Unicenter Service Management, which will allow businesses to track how technology services, such as e-mail and network access, are being used by different company departments, as well as the amount of time those services are down. By gathering more accurate usage and performance data, IT departments can charge corporate departments based on meaningful measurements, Barrenechea said.

That billing information is an important addition to CA's products, one customer said.

"To get funding for IT projects, we have to align ourselves to the business," said Tony Cardenas, a security administrator at Arizona Electric. "We can show where we're spending our time."

Overall, CA said, the management market is getting more competitive.

"The reason everyone wants to be in the management game is because it is the No. 1 issue for CIOs," said Yogesh Gupta, CA's chief technology officer.